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The FCA’s Regtech Call for Input

The UK’s Financial Conduct Authority yesterday issued a “call for input” on “Using technology to achieve smarter regulatory reporting”, which can be found here. The paper describes a “Techsprint” which took place in November 2017, at which various parties undertook a proof of concept on “machine executable” rules and regulatory reporting.

Under such a scheme, different rules in the handbook and elsewhere are cast into a “Semantics of Business Vocabulary and Business Rules” (SBVR) format. Then using other standards the SBVR is converted to a Resource Description Framework (RDF) standard file. Firms may then describe their data in this form in their own databases. This permits the rules to be “machine executable” – the reporting system reads the rules and uses them to derive which data is required within the firm’s systems. Any rule change can thus be implemented programmatically , reducing the manual intervention requiredaround regulatory reporting.

The Call for Input closes in June, and is part of an initiative that seeks to streamline the complex world of regulatory data reporting. Energy and commodity market participants are likely to be interested in such initiatives, given the proliferation of reporting rules that cover the market. These include not only financial regulations such as EMIR but also physical reporting such as under REMIT and others, which could benefit from such an approach.

This follows an announcement that the FCA and CFTC are intending to collaborate on “Fintech” initiatives, as announced here. The agreement will see sharing of information across the CFTC’s LabCTFC and the FCA’s Project Innovate initiatives, allowing solutions to be tested and considered within the other market.

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About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets.
He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology.
Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation.
Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations.
Mr. Handler holds a degree in computer science from Imperial College, University of London.